ANDHRA BANK Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) In this writ petition, the petitioner-bank is assailing the notices issued under Section 10 and subsequent notices issued under Sections 8(1) and 8(2) of the Interest-tax Act, 1974, for the assessment years 1992-93, 1993-94 and 1994-95 and prayed for the issue of a writ of certiorari or any other appropriate writ calling for the records relating to the issue of the above notices and quash the said notices, holding that the issue of the said notices is illegal, without jurisdiction and contrary to the provisions of the Interest-tax Act.

(2.) The petitioner is a nationalised bank. Its entire capital is owned by the Central Government. Under the provisions of the Interest-tax Act, 1974 (hereinafter referred to as "the Act"), the petitioner is obliged to file a return disclosing its chargeable interest to tax. Accordingly, the petitioner-bank filed its returns disclosing chargeable interest under the Act for the above three assessment years enclosing copies of its audited profit and loss account and balance-sheet. According to the petitioner, it had declared the full interest, which is chargeable to interest-tax in terms of charging Section 5, read with Section 2(7) of the Act. In the above three returns, the petitioner-bank returned the interest income accrued on the loans and advances but without including the interest on securities. The said income as declared by the assessee and as accepted by the Assessing Officer while framing the assessment is as follows :

(3.) According to the petitioner-bank, in pursuance of the returns filed for the above assessment years, the assessments were framed determining the tax liability under the said Act. However, subsequently, the Assessing Officer issued notices on 21/08/1997, purported to be under Section 10 of the Act, reopening the assessments for all the three years in question and the petitioner was directed to file return on the premise that the chargeable interest for the assessment years in question has escaped assessment and the petitioner-bank was called upon to file the returns. The petitioner, however, did not comply with the said notices but wrote a letter seeking withdrawal of the said notices. But the respondent without giving any reply to the letter of the petitioner dated 24/02/1998, issued notices under Sections 8(1) and 8(2) of the Act. Aggrieved by the said action of the respondent, the petitioner has approached this court.